If the Tories win,HMT is going to have a real job managing expectations ahead of Budget. By historic standards there is v little headroom against the new fiscal rules: 5b a year against c700b current spending. Hammond left office with 27b of headroom against his deficit target 1/
This could easily be wiped out if the OBR downgrade their forcecast for the economy/public finances. HMT will therefore want to build up a much bigger buffer to guard against future forecast moves / unexpected spending pressures. That means raising some tax at some point 2/
Even the manifesto raised more tax than it cut, but they will prob have to go further. And all political logic points to doing it in the first Budget of a new parl: get the politically difficult stuff done while MP discipline remains high and next GE is still a long way off 3/
So I suspect the nature of briefing around the Budget will change significantly post election. Expect we’ll be reading lots of stories about how difficult it all is, and some pretty eye-opening revenue raisers to be floated to test how they might land 4/
This is going to be an ongoing problem for the Tories: long-term pressures from ageing / healthcare / decarb means direction of travel is for tax rises, not cuts. Suspect the tax-cutting part of the party is not going to enjoy the 2020s 5/
